RE: "Super Storm" Sandy and Hurricane Deductibles

"Facing the largest natural disaster since Hurricane Katrina, America's property/casualty insurers have already begun paying tens of thousands of claims to the victims of 'Super Storm' Sandy, honoring their commitments and helping policyholders get back on their feet. At this point, the nation's number one goal should be restoring the affected communities and ensuring their future resiliency."

"It is unfortunate that political expediency can sometimes interfere during a recovery. Insurers use hurricane deductibles to help keep costs low. These deductibles are approved by state regulators, and insurers rely on that approval process to provide certainty for the coverage contracts and the claims process. The uncertainty created as politicians or bureaucrats simply change the rules makes providing coverage more difficult and expensive for everyone. Further, basing these decisions on a ruling from the National Weather Service – a ruling process with no transparency – only adds to the uncertainty. In the face of billions of dollars in claims, insurers need to know that their contracts will stand up and are not subject to arbitrary decision making."

"These officials undoubtedly mean well, but they don't understand that what they think is helping consumers will ultimately hurt them in the long run by distorting the market. Instead, politicians - local and federal – could do far more for the communities affected by Sandy by focusing their efforts on not only rebuilding, but preparing for the next disaster. One way to do so is by focusing on mitigation efforts, including stronger building codes that make our homes, offices and other structures more durable during a storm."

"It is a shame that it can take a tragedy, but hopefully we can use this disaster to highlight the need for mitigation and not actions that distort markets. Otherwise coverage for those who need it most will become harder to find and more expensive to provide."